California AB-5 Law
- Thread starter chris f
- Start date
Run&Gun
Veteran
These articles are always misleading.
My understanding of how these tax credits work is it’s a reduction in what is owed in taxes, not actual cash taken from the coffers and given to them like an individuals tax refund or how our tax dollars directly buy police cars, tanks for the military or fund road repairs.
My understanding of how these tax credits work is it’s a reduction in what is owed in taxes, not actual cash taken from the coffers and given to them like an individuals tax refund or how our tax dollars directly buy police cars, tanks for the military or fund road repairs.
puredrifting
Major Contributor
Some states and countries actually offer "tax rebates" rather than "tax credits". So in some cases, it is financial outlay from capital raised/infused, actually refunded back to the producers pockets. This is part of the legendary Hollywood Accounting system. But I think tax credits are more common.
Ya but this is irrelevant. If someone has a $100M production - a medium tier for features - and will pay oodles in payroll tax, having a smaller bill is still coming off a total budget. What it does do as well is make the elected and unelected officials decide who gets the largess. Which, naturally, provides the incentive to the corporation to play nice with the same officials. Or favors go the other way.
Oh, and a side note from the Oakland .... I mean, LA .. I mean Las Vegas Raiders.
Interview with their GM Mike Mayock.
https://www.raiders.com/news/genera...es-first-season-in-silver-and-black-2019-rook
Run&Gun
Veteran
Yeah, but there's still a big difference between not paying say $5mill in taxes vs. the state giving them $5mil in cash. Regardless, I don't think any of these major productions, etc. should be given any type of tax incentives period. Anywhere in the world. It's disgusting that these multi-million/billion dollar operations are essentially treated like someone living below the poverty line that can't afford ramen noodles, while we actually have people who need assistance and can't get it.
And continuing with your Raiders side bar. "Our" NFL team was just bought about a year and a half ago by a billionaire hedge fund manager and he is moving the teams practice facility and offices just across the border to our neighboring state. The facility is estimated to cost around $200 million, they are being given approximately $115-$120 million in tax breaks and the government(federal, state and local) is spending $40 million for road construction for access to the facility from the interstate.
And Tepper, naturally, moved his hedge fund to Miami. No state income tax, cheaper real estate, bitchin' weather too.
PS. For an NFL player and/or movie star, 13% of his income is a lot money. It's different when you have stock in the big tech and the company's market cap goes through the roof and you will only sell it once your holdings qualify for the capital gain treatment. But wages ain't capital gain. An average wage in the NFL is ~ $4M/Y, so that's half a mil in savings and, for the team and its $200M payroll, it's a $26M discount.
Of course, despite that, Florida teams (Dolphins, Bucs and Jags) still suck.
PS. For an NFL player and/or movie star, 13% of his income is a lot money. It's different when you have stock in the big tech and the company's market cap goes through the roof and you will only sell it once your holdings qualify for the capital gain treatment. But wages ain't capital gain. An average wage in the NFL is ~ $4M/Y, so that's half a mil in savings and, for the team and its $200M payroll, it's a $26M discount.
Of course, despite that, Florida teams (Dolphins, Bucs and Jags) still suck.
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chris f
Veteran
Forgot to update after the meeting I attended and after my good friend who's office is 10 feet from mine met with his employment lawyer the other day and gave me his cliff notes.....
Bottom line: if you're hiring any crew member or on-camera talent as a 1099 independent contractor in the state of California, you are putting yourself at risk. The first thing that is going to be a stopping point for almost all of us is Sec. 2 B:
That pretty much ends it right there for 99% of us, but for those who might think they can find a loophole, not only must you pass the above step, you will also have to pass the following scenarios that are laid out in the Business To Business exception (there are 12 total, but I think anyone running a sound business can easily pass the other 9):
Again, for anyone thinking they can find a loophole in all three of these things that will hold up in court before a judge that likely doesn't know the ins and out of production, to even get to that point you would need to pass the first thing I mentioned - Section 2. B. (which you won't for 99% of crew and talent positions)
As of now those are the laws. Anyone knowingly or unknowingly breaking them are subject to hefty fines and all that it takes is one crew member reporting you or an audit from the employment department (my friend mentioned above was randomly audited just a few months ago). In most of what I've read and heard everyone forgets to mention the auditing part. Again, I don't want to be doom and gloom, but it just takes one crew member to report you - something to consider when putting together crews especially when you don't know everyone on set. Also, if you want to try your luck at the Business to Business exemption (not recommended) you'll need written contracts with everyone and they will need to provide proof that they qualify (copies of business licenses, proof that they work with other businesses, proof that they advertise, proof of their business location, etc, etc. 99% of the crew I know don't have all of this information neatly pre-packaged in a downloadable .pdf for you (and it doesn't matter anyways because you're not going to qualify for the business to business exception, just wanted to add that because I know someone is going to think they can outsmart the system).
As for optimism moving forward: my friend's lawyer said that most of the major lawsuits against the law are getting their day(s) in court sometime in March I believe. Luckily there are some pretty big and well funded organizations that are fighting this bill. Also, the bill's author has been quoted saying that she already has plans to make changes to the law. I can't confirm this, but my other friend who has also met with his employment lawyer and has an appointment with the bill's author told me that she's already working on the revisions.
So in conclusion the law is in effect now and everyone is responsible for following it (or disobeying it at your own risk) and there is hope that the law will get changed sometime this year to allow video production/filmmaker peeps to be able to hire people (in who knows what capacity) as independent contractors.
Proceed as you see fit. For me personally I'm likely going to take a break from producing at least until things get worked out and am only going to operate as a hired crew member (cinematographer/director) for the foreseeable future and if the client needs additional crew members along with me I am going to provide crew recommendations if the client will allow each crew member to bill the client directly for their labor and gear rentals (which means that my crew members will need to shore up their own affairs to be considered by most clients - ie. business license, business entity, proof of production insurance as well as signing any paperwork the client provides)
Bottom line: if you're hiring any crew member or on-camera talent as a 1099 independent contractor in the state of California, you are putting yourself at risk. The first thing that is going to be a stopping point for almost all of us is Sec. 2 B:
Almost everyone you hire that is doing a role that is common in video production is going to fall into this. Courts won't care that you're not a gaffer and you needed to hire a very specialized gaffer that isn't in the usual course of your business, they're going to look at it like "Is it common for film and video productions to include lighting as part of their normal operations? Yes, so it is in the usual course of business for video production companies to hire specialists to work on the lighting". You can continue to play this out.....is it in the usual course to have actors? camera operators? producers? sound operators? the answer is going to be yes 99% of the time.
That pretty much ends it right there for 99% of us, but for those who might think they can find a loophole, not only must you pass the above step, you will also have to pass the following scenarios that are laid out in the Business To Business exception (there are 12 total, but I think anyone running a sound business can easily pass the other 9):
This pretty much includes all on-camera talent whose job is literally to be directed as well as any crew members that are going to be under direction from anyone from the production company.
If you're hiring crew that is going to be using your gear, this is going to be a potential sticking point. Talent would likely need to furnish their own wardrobe as well to be completely in the clear here.
Going to be damn near impossible to claim you're following this one when there's a call sheet with a schedule and location (aka written proof) telling each talent and crew member where they have to be and when to do their job (not to mention when meal breaks are going to be and other employer/employee looking things).
Again, for anyone thinking they can find a loophole in all three of these things that will hold up in court before a judge that likely doesn't know the ins and out of production, to even get to that point you would need to pass the first thing I mentioned - Section 2. B. (which you won't for 99% of crew and talent positions)
As of now those are the laws. Anyone knowingly or unknowingly breaking them are subject to hefty fines and all that it takes is one crew member reporting you or an audit from the employment department (my friend mentioned above was randomly audited just a few months ago). In most of what I've read and heard everyone forgets to mention the auditing part. Again, I don't want to be doom and gloom, but it just takes one crew member to report you - something to consider when putting together crews especially when you don't know everyone on set. Also, if you want to try your luck at the Business to Business exemption (not recommended) you'll need written contracts with everyone and they will need to provide proof that they qualify (copies of business licenses, proof that they work with other businesses, proof that they advertise, proof of their business location, etc, etc. 99% of the crew I know don't have all of this information neatly pre-packaged in a downloadable .pdf for you (and it doesn't matter anyways because you're not going to qualify for the business to business exception, just wanted to add that because I know someone is going to think they can outsmart the system).
As for optimism moving forward: my friend's lawyer said that most of the major lawsuits against the law are getting their day(s) in court sometime in March I believe. Luckily there are some pretty big and well funded organizations that are fighting this bill. Also, the bill's author has been quoted saying that she already has plans to make changes to the law. I can't confirm this, but my other friend who has also met with his employment lawyer and has an appointment with the bill's author told me that she's already working on the revisions.
So in conclusion the law is in effect now and everyone is responsible for following it (or disobeying it at your own risk) and there is hope that the law will get changed sometime this year to allow video production/filmmaker peeps to be able to hire people (in who knows what capacity) as independent contractors.
Proceed as you see fit. For me personally I'm likely going to take a break from producing at least until things get worked out and am only going to operate as a hired crew member (cinematographer/director) for the foreseeable future and if the client needs additional crew members along with me I am going to provide crew recommendations if the client will allow each crew member to bill the client directly for their labor and gear rentals (which means that my crew members will need to shore up their own affairs to be considered by most clients - ie. business license, business entity, proof of production insurance as well as signing any paperwork the client provides)
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Quote: "The two sides to AB-5, and how we can fix the gap"
https://blog.freelancersunion.org/2020/01/23/the-two-sides-to-freelancer-misclassification-legislation/
"The way I see it, there's broad agreement that no one wants to hurt one group at the expense of the other. It’s possible to be disgusted at giant companies using legal loopholes to pay their employees as little as possible while also wanting the freedom to choose freelancing. And we can push for laws that protect both sets of workers."
https://blog.freelancersunion.org/2020/01/23/the-two-sides-to-freelancer-misclassification-legislation/
"The way I see it, there's broad agreement that no one wants to hurt one group at the expense of the other. It’s possible to be disgusted at giant companies using legal loopholes to pay their employees as little as possible while also wanting the freedom to choose freelancing. And we can push for laws that protect both sets of workers."
Jim Feeley
Veteran
Nothing specific about people like us, though some mention of fellow travelers:
California Lawmaker Wants Labor Law for Freelancers Changed
By The Associated Press
SACRAMENTO, Calif. — The author of a sweeping new California labor law said Thursday that she intends to ease its restrictions on freelance journalists and others after months of protests that it is already costing people their jobs.
Democratic Assemblywoman Lorena Gonzalez said in a series of tweets that she already has proposed legislative language removing a requirement that any freelancer with more than 35 submissions to a single media outlet in a year must be considered an employee.
It was just one of many efforts in the law to define which workers must be treated as employees rather than independent contractors.
Rest of the story:
https://www.nytimes.com/aponline/20...a-freelance-journalists-1st-ld-writethru.html
California Lawmaker Wants Labor Law for Freelancers Changed
By The Associated Press
SACRAMENTO, Calif. — The author of a sweeping new California labor law said Thursday that she intends to ease its restrictions on freelance journalists and others after months of protests that it is already costing people their jobs.
Democratic Assemblywoman Lorena Gonzalez said in a series of tweets that she already has proposed legislative language removing a requirement that any freelancer with more than 35 submissions to a single media outlet in a year must be considered an employee.
It was just one of many efforts in the law to define which workers must be treated as employees rather than independent contractors.
Rest of the story:
https://www.nytimes.com/aponline/20...a-freelance-journalists-1st-ld-writethru.html
Surprise, surprise - not. As I immediately said in my post about this law - it is inevitable that it will change... and here we are, exactly as I predicted, it's going to change, and even the person who wrote this law wants it changed. CA is a winner state - they understand that the creative community is the heart and soul of its economic success and they'll do everything to protect that.
Matt Gottshalk
Resident Preditor
And now Congress is trying to push the national version of this BS law.
Run&Gun
Veteran
In some form or fashion, they’ve been trying similar things for at least half-a-decade. I have a huge client that starting in 2015(we were given a heads-up/warning in mid/late ‘14) put most of us freelancers on a “day count”, meaning we could only work for them a certain number of days per year, because the IRS had come to them and told them we were used so much that we were considered employees(and all that entails). Even most of us that are incorporated and paid through our businesses are still kept under this cap. And as has been said countless times, it did nothing but hurt most of the actual people that the rules were/are supposedly there to help. And ironically it also results in less money into government coffers, because less income means less taxes paid.
Here’s a little tip to the government at any level: if a freelancer is making six figures a year, they probably don’t want to have anything to do with being an employee somewhere. If you want to protect and help the minimum wage workers at Wal-Mart or the like from being abused, by all means, please do, but don’t kill the livelihoods of those of us that made professional career decisions to do this.
Here’s a little tip to the government at any level: if a freelancer is making six figures a year, they probably don’t want to have anything to do with being an employee somewhere. If you want to protect and help the minimum wage workers at Wal-Mart or the like from being abused, by all means, please do, but don’t kill the livelihoods of those of us that made professional career decisions to do this.
+1
Absolutely. But here's the flip side to this: lawmakers must respond to citizens. If a bad law is proposed or passed, or a law that looked good on paper transpires to have bad unintended consequences, it must be reformed or repealed. That doesn't happen by itself, laws once passed tend to have inertia. So the job of citizens is not to complian quietly to themselves or friends or on boards, but take their compliants straight to the lawmakers. That's the only way things get better - a lawmaker cannot be an expert on every single thing, so they naturally will make mistakes. It is the job of the affected citizens to hold lawmakers accountable. A lot of us complain on boards... which does nothing. How many of us take our concerns directly to the lawmakers? Democracy works by engagement. Only in a dictatorship do people have to accept whatever is given to them. We still live in a democracy... as the founding fathers said, they gave us a republic "if we can keep it". Let's keep it! Contact your representative and let them know your concerns and remind them they serve you, and you vote.
+1
Absolutely. But here's the flip side to this: lawmakers must respond to citizens. If a bad law is proposed or passed, or a law that looked good on paper transpires to have bad unintended consequences, it must be reformed or repealed. That doesn't happen by itself, laws once passed tend to have inertia. So the job of citizens is not to complian quietly to themselves or friends or on boards, but take their compliants straight to the lawmakers. That's the only way things get better - a lawmaker cannot be an expert on every single thing, so they naturally will make mistakes. It is the job of the affected citizens to hold lawmakers accountable. A lot of us complain on boards... which does nothing. How many of us take our concerns directly to the lawmakers? Democracy works by engagement. Only in a dictatorship do people have to accept whatever is given to them. We still live in a democracy... as the founding fathers said, they gave us a republic "if we can keep it". Let's keep it! Contact your representative and let them know your concerns and remind them they serve you, and you vote.
Ah, great pro business California. The 2019 NFL sack leader Shaq Barrett put it this way.
https://www.joebucsfan.com/2020/02/shaq-i-hate-moving-buccaneers-blog/
https://www.joebucsfan.com/2020/02/shaq-i-hate-moving-buccaneers-blog/
Aah, I guess we need a refresher on just how badly "business unfriendly" California is doing in business? Have we already forgotten? CA is only #1, oh dear, we need to take lessons from someone who should stick to their area of expertise, "sacking", because it ain't economics. I love all those complaints about taxes. CA with its high taxes (and other high tax states like NY and MA) somehow manage to economically outdo "low tax" states, and have superior living standards to boot - not to mention have to subsidise many of those low tax paradise states. The lessons are all over the world. You want low taxes? Move to Somalia, there's really no taxes there... as a result you can't pay any police force, so you end up paying extortion to gangs which is another form of payment with an appropriate lifestyle and standard of living - but low taxes! Highest standards of living for most citizenry in places like Scandinavia have the highest taxes. Civilization costs money - as in taxes. I hear Bangladesh has low taxes. The less civilization, the less economic activity, the less taxes and then you end up in a tax free jungle where you negotiate your meals with a tiger. Taxes fund civilization and when "sack leader" eventually needs the medical help for his broken body, he'll part with a lot more than that paycheck when the top expertise is not in Tampa, but in highly taxed biomedical science leadership in Massachusets, or technology developed in "crazy taxed" Los Angeles and Silicon Valley.
Complaining about taxes only tells us that you know the cost of everything but the value of nothing. It's not a very sophisticated understanding of economics, or indeed of civilization and what it takes to create and sustain it. The proof we see all around the world.
Bangladesh has extremely high corporate tax rates, actually... about 35%, similar to the rates in such economic powerhouses as Argentina, Burundi, the Congo, Zambia, Brazil, Venezuela, Colombia, Namibia, and Cameroon.
Compratively, California's corporate tax rate is a flat ~8.8%, but also has a large hidden cost of overregulation. It's friendly to Big Businesses... not so much to small businesses (especially sole proprietor and pass-through business entities that are double-taxed... and small businesses can't easily scale their way past regulatory compliance or lobby for government favors).
The highly touted Scandinavian nations actually also have very low corporate taxation. Interestingly, they're also almost all ranked in standard of living below Switzerland, a nation with fairly low taxation overall.
In Q1 of 2019, California had roughly half the GDP growth of Texas and West Virginia.
All this to say.... you're getting caught in the weeds and blowing smoke. There are no generalizations that one can make to say high taxes make everything better, nor that low taxes makes everything worse.
The issue at hand is that politicians overreached, made a stupid law that has real, immediate consequences for a whole lot of working people, and are now slowly dithering about how best to fix their mess while the damage goes on.
Yeah, I'm not packing my bags for Oxnard any time soon.
Compratively, California's corporate tax rate is a flat ~8.8%, but also has a large hidden cost of overregulation. It's friendly to Big Businesses... not so much to small businesses (especially sole proprietor and pass-through business entities that are double-taxed... and small businesses can't easily scale their way past regulatory compliance or lobby for government favors).
The highly touted Scandinavian nations actually also have very low corporate taxation. Interestingly, they're also almost all ranked in standard of living below Switzerland, a nation with fairly low taxation overall.
In Q1 of 2019, California had roughly half the GDP growth of Texas and West Virginia.
All this to say.... you're getting caught in the weeds and blowing smoke. There are no generalizations that one can make to say high taxes make everything better, nor that low taxes makes everything worse.
The issue at hand is that politicians overreached, made a stupid law that has real, immediate consequences for a whole lot of working people, and are now slowly dithering about how best to fix their mess while the damage goes on.
Yeah, I'm not packing my bags for Oxnard any time soon.
Matt Gottshalk
Resident Preditor
Yeah, really business friendly:
https://www.southstarcommunities.com/blog/companies-leave-california-bound-for-texas
The highly touted Scandinavian nations actually also have very low corporate taxation. Interestingly, they're also almost all ranked in standard of living below Switzerland, a nation with fairly low taxation overall.
I guess it depends on which metric you're looking for. According to the lastest 2020 rankings, Denmark, Sweden, Norway are all ahead of Switzerland for "Quality of Life Rankings" US News, and Norway has a higher per capita GDP than Switzerland too:
https://www.usnews.com/news/best-countries/quality-of-life-rankings
In Q1 of 2019, California had roughly half the GDP growth of Texas and West Virginia.
One quarter growth results are not a good metric, because of variability and one has to be quite careful with growth as a metric too - very large and rich economies grow slower, because it is much easier to grow faster from a lower base. Picking one quarter is too subject to change. A growth for the whole year is a better metric, so f.ex. in 2018, CA was one of the fastest growing economies, at #6 of the 50 states, 3.5% growth, while TX was behind at #10 and 3.2%, so CA outstripped TX completely despite being a massively larger economy, which is absolutely astounding (West Virginia was much worse #19 and 2.4%):
https://www.usatoday.com/story/money/2019/08/01/economic-growth-by-state-gdp-fastest-growing-shrinking-economies/39822123/
But growth by itself is not the best metric. It's more meaningful to look at productivity and per capita gdp. So, for example, CA has per cap of $74,205 and TX $61,167 and West Virginia $43,053, and by the way, West Virginia is 48 out of 50 states in per capita GDP (only Idaho and Mississippi are worse), so being almost at the bottom, one would hope they'd grow faster than CA the fifth largest ecomomy of the world (still didn't do in 2018!). So, while you wouldn't move to Oxnard, I wouldn't be packing my bags for anywhere in West Virginia (or TX) either... to each their own!
Bangladesh has extremely high corporate tax rates, actually... about 35%, similar to the rates in such economic powerhouses as Argentina, Burundi, the Congo, Zambia, Brazil, Venezuela, Colombia, Namibia, and Cameroon.
Hmm. The post I was responding to was a complaint about personal taxes, as in salary of the "sacker". Now you bring in corporate taxes, which is a different kettle of fish. And you say CA is 8.8%, but that's not what was discussed - it was individual income tax. Even taking that into account: but also has a large hidden cost of overregulation - well, that's valid to a degree (and I've complained about this myself), but ultimately this overregulation has not hurt the economy of CA, as we know, while it has almost the same population as Canada, it has almost twice the size of economy... insanely productive despite the overregulation. Certainly, regulations are much looser, environmental as well as worker protections in Bangladesh, whatever the supposed corporate tax rates, with resultant low wages and horrific standard of living - but hey, you get cheaper prices from a brutalized worker force, so yay "little regulation".
The issue at hand is that politicians overreached, made a stupid law that has real, immediate consequences for a whole lot of working people, and are now slowly dithering about how best to fix their mess while the damage goes on.
Agreed, it's about AB-5. But I guess I have a different perspective. While I can be (and am) critical of AB-5, I don't see it as evil politicians overreaching. I see incompetence and arrogance, but "good intentions" - which is the difference, since so many here absolutely see it as intentionally and premeditated evil desire to "control" etc. The difference being, that if the intentions are good, you will see reform - which we are already starting to see. And here's the ultimate kicker - in the long run, a reformed AB-5 will be another strength for CA, with better protections for everyone and superior quality of life and superior economy. Meanwhile, AB-5 will not reach Bangladesh (or Mississippi) and they will remain on the bottom - gloriously free of regulation, and a hell hole for most of their residents.
https://www.southstarcommunities.com/blog/companies-leave-california-bound-for-texas
Yawn. Companies come and go. What do you think outsourcing is? It's companies coming to another country (or state). What is the prevalent reason - lower costs of doing business... that's how Bangladesh got its textile industry and Mexico got a lot of U.S. automotive industry. I'm happy CA is NOT attracting such companies, because we pay people well here and you can't just brutalize our employees. It means exploitation goes elsewhere. Instead, high-tech and high value added companies COME to CA, more than compensating for the "losses", as I provided in a link in another post - same as people leaving CA, and coming to CA - the ones who leave have lower income and eduction compared to the ones COMING to CA, for a net gain for CA economy - that's how CA is the world's fifth largest economy and TX is not, either by absolute size or per capita. CA is the most productive economy on the planet - the countries ahead of it, USA, China, Japan, Germany all have much larger populations. TX meanwhile is much, much lower - and I predict will fall behind further as it attracts lower skill workers vs the highest skill and most competitive markets of CA. We shall see... as always! After all, CA doom has been predicted from all the usual sources for decades and decades now, and CA only grows bigger and better.
I guess it depends on which metric you're looking for. According to the lastest 2020 rankings, Denmark, Sweden, Norway are all ahead of Switzerland for "Quality of Life Rankings" US News, and Norway has a higher per capita GDP than Switzerland too:
https://www.usnews.com/news/best-countries/quality-of-life-rankings
In Q1 of 2019, California had roughly half the GDP growth of Texas and West Virginia.
One quarter growth results are not a good metric, because of variability and one has to be quite careful with growth as a metric too - very large and rich economies grow slower, because it is much easier to grow faster from a lower base. Picking one quarter is too subject to change. A growth for the whole year is a better metric, so f.ex. in 2018, CA was one of the fastest growing economies, at #6 of the 50 states, 3.5% growth, while TX was behind at #10 and 3.2%, so CA outstripped TX completely despite being a massively larger economy, which is absolutely astounding (West Virginia was much worse #19 and 2.4%):
https://www.usatoday.com/story/money/2019/08/01/economic-growth-by-state-gdp-fastest-growing-shrinking-economies/39822123/
But growth by itself is not the best metric. It's more meaningful to look at productivity and per capita gdp. So, for example, CA has per cap of $74,205 and TX $61,167 and West Virginia $43,053, and by the way, West Virginia is 48 out of 50 states in per capita GDP (only Idaho and Mississippi are worse), so being almost at the bottom, one would hope they'd grow faster than CA the fifth largest ecomomy of the world (still didn't do in 2018!). So, while you wouldn't move to Oxnard, I wouldn't be packing my bags for anywhere in West Virginia (or TX) either... to each their own!
Bangladesh has extremely high corporate tax rates, actually... about 35%, similar to the rates in such economic powerhouses as Argentina, Burundi, the Congo, Zambia, Brazil, Venezuela, Colombia, Namibia, and Cameroon.
Hmm. The post I was responding to was a complaint about personal taxes, as in salary of the "sacker". Now you bring in corporate taxes, which is a different kettle of fish. And you say CA is 8.8%, but that's not what was discussed - it was individual income tax. Even taking that into account: but also has a large hidden cost of overregulation - well, that's valid to a degree (and I've complained about this myself), but ultimately this overregulation has not hurt the economy of CA, as we know, while it has almost the same population as Canada, it has almost twice the size of economy... insanely productive despite the overregulation. Certainly, regulations are much looser, environmental as well as worker protections in Bangladesh, whatever the supposed corporate tax rates, with resultant low wages and horrific standard of living - but hey, you get cheaper prices from a brutalized worker force, so yay "little regulation".
The issue at hand is that politicians overreached, made a stupid law that has real, immediate consequences for a whole lot of working people, and are now slowly dithering about how best to fix their mess while the damage goes on.
Agreed, it's about AB-5. But I guess I have a different perspective. While I can be (and am) critical of AB-5, I don't see it as evil politicians overreaching. I see incompetence and arrogance, but "good intentions" - which is the difference, since so many here absolutely see it as intentionally and premeditated evil desire to "control" etc. The difference being, that if the intentions are good, you will see reform - which we are already starting to see. And here's the ultimate kicker - in the long run, a reformed AB-5 will be another strength for CA, with better protections for everyone and superior quality of life and superior economy. Meanwhile, AB-5 will not reach Bangladesh (or Mississippi) and they will remain on the bottom - gloriously free of regulation, and a hell hole for most of their residents.
https://www.southstarcommunities.com/blog/companies-leave-california-bound-for-texas
Yawn. Companies come and go. What do you think outsourcing is? It's companies coming to another country (or state). What is the prevalent reason - lower costs of doing business... that's how Bangladesh got its textile industry and Mexico got a lot of U.S. automotive industry. I'm happy CA is NOT attracting such companies, because we pay people well here and you can't just brutalize our employees. It means exploitation goes elsewhere. Instead, high-tech and high value added companies COME to CA, more than compensating for the "losses", as I provided in a link in another post - same as people leaving CA, and coming to CA - the ones who leave have lower income and eduction compared to the ones COMING to CA, for a net gain for CA economy - that's how CA is the world's fifth largest economy and TX is not, either by absolute size or per capita. CA is the most productive economy on the planet - the countries ahead of it, USA, China, Japan, Germany all have much larger populations. TX meanwhile is much, much lower - and I predict will fall behind further as it attracts lower skill workers vs the highest skill and most competitive markets of CA. We shall see... as always! After all, CA doom has been predicted from all the usual sources for decades and decades now, and CA only grows bigger and better.